Last week EY announced its acquisition of leading managed services and technology solutions firm Riverview Law, a ground-breaking move in the market which will no doubt affect the alternative legal services marketplace as we know it.
Providing Riverview with not only the security of EY’s global brand and resources, but also access to its stellar global client base, this acquisition presents a prime opportunity to bring managed legal services further into the mainstream and provide clients with more efficient, faster and better automated services.
EY, although not acquiring much in terms of size and scope, has selected one of the first credible disruptors in the legal market, which launched in 2012 with backing from DLA Piper, who initially owned a 21% stake in Riverview’s parent company LawVest. Riverview has received reasonable praise since its inception, not to mention through the use of its virtual assistants technology from Kim Technologies. Although EY will not also be acquiring Kim, the accountancy giant will retain use of its software, having signed a 10 year, non-exclusive contract with the company.
Chris Price, EY’s global head of alliances (tax) is expected to take over as chief exec of Riverview once the deal has been completed, succeeding current CEO Karl Chapman. Price has already hinted at the growth expectations for its managed services arm, announcing that: “We plan to take the 100 people in Riverview and build that out into two to three thousand people over the next five to seven years.”
Although the fee was undisclosed for the EY’s purchase, Legal Business reports that: “Riverview’s turnover is believed to have risen to more than £10m since it launched in 2012, meaning the acquisition is expected to carry a hefty price tag.”
With such a high level of investment made by the Big Four firm, along with the ambitious growth plans hinted at by Price, it is clear that Riverview poses a lucrative new area of business for the firm. Cornelius Grossmann, global head of legal at EY, has confirmed its strategy for the new investment: “What we want to do with Riverview is enter this as a new business line. We’re not changing what our 2,200 lawyers are doing, and we’re going to invest in more legal advisory capacity.”
“We will hire into Riverview more people to scale up that business and scale up more support in our global delivery centres to support Riverview on the delivery of legal managed services.”
EY are likely the second major deal in terms of M&A in the New Law space. In May 2017, document management system iManage acquired AI specialist RAVN Systems, which marked a key indication of significant growth in the demand for new technology in legal services.
Moreover, the New Law market is beginning to attract external investors as it was also announced that UK private equity firm Bowmark Capital has purchased Bryan Cave Leighton Paisner’s stake in the contract lawyers business Lawyers On Demand (LOD).